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Samsung loves it! The Smartphone Market is entering a Price Phase away from Innovation and Value, Cites ABI

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ABI Research reports today that the average US implied subsidy for Samsung devices is 84% as compared to Apple 74% and HTC 80%, although absolute value of subsidy is $110 higher for the average Apple product. OEMs and their carrier partners increasingly have to continue to employ highly tactical methods to make sure that their devices are subsidized to a competitive price point in order to help prevent consumers acting to avoid their product on price point alone.


Stuart Carlaw, chief research officer, stated: "Samsung continues to squeeze its competitors at every turn. The Samsung Galaxy SIV is now considered on a par with Apple's iPhone 5. Coupled with better subsidy, the breadth of its device portfolio, increasingly savvy marketing, and its excellence in channel execution, it is little wonder Samsung is dominating the mobile handset market from top to bottom."

 

# 2. US Handset Subsidy Ratios

Senior practice director for devices, Nick Spencer, added a note of caution: "The smartphone market in particular is entering a new phase focusing on execution and price, rather than innovation and value."

 

Spenser added that "Samsung's scale and supply chain excellence is allowing it to put its competitors under increasing price pressure and win market share. This is a major concern for the rest of the market, especially for smaller, less efficient vendors, as margins will be squeezed and overall market value reduced."

 

Perhaps ABI didn't get the memo. As long as Apple keeps innovation and design specs high, Apple will continue to win in the market. By win I mean winning where it really counts: in profits. The fact is that Apple currently has a stranglehold on industry Profits.

 

Who cares about Samsung's so-called "savvy marketing" if they're not raking in market leading profits? Playing the market share game is for morons if the profits don't follow.  

 

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Comments

Most people I know own an iPhone and it's not because of price or innovation; it's because of status. There is an implied coolness in owning an iPhone and people want to own what others wish they had. I know of no one that purchases a "Galaxy S Whatever" because it's the cool phone that impresses. They buy it because they can't afford an iPhone or are Apple haters and limit their buying options. Just saying.

And here I thought that Samsung "innovated" haha yeah right! They need to switch their "The Next Big Thing Is here" to "The Cheapest thing is here giveaway" it's so sad how the media eats it up and says that they are innovating when in fact all they are actually doing is giving their products away just to have more "volume" haha so sad couldn't agree with you more Jack, "Playing the market share game is for morons if the profits don't follow."

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